An investigation of the bridging interface strategies used by Chinese MNE when undertaking FDI to Taiwan

Abstract

Much research looks at the liabilities of foreignness MNEs may experience once they have entered a market, ex-post. Fewer studies, however, look ex-ante at how MNEs deal with market entry approval processes prior to FDI. We explore how Chinese MNEs use service agents when entering the Taiwanese market to create appropriate ‘bridging interface strategies’ that deal with the economic and social fit issues of their FDI projects. Such strategies, if undertaken judiciously, may potentially reduce project approval times for FDI projects. We draw from the theoretical lenses of discriminating alignment and status similarity applied to a unique sample of 415 Chinese MNE FDI project applications. We find that Chinese MNEs are able to strategically build economic and social-fit bridging interfaces to enter Taiwan, a country with a complex geopolitical relationship to China, if they use the correct strategies.